US Senate appropriators urged not to add ship funds

Senator John McCain has urged Senate appropriators not to fund the Navy’s plan to buy 10 warships each from Lockheed Martin and Australia’s Austal in an omnibus $US1.1 trillion spending bill they hope to wrap up this week.

McCain, the top Republican on the Senate Armed Services Committee, said lawmakers needed more information before they could approve the Navy’s plan to buy 20 ships, instead of just 10 from one bidder.

Navy Secretary Ray Mabus, Chief of Naval Operations Admiral Gary Roughead and acquisition chief Sean Stackley are due to testify about the Littoral Combat Ship program at a hearing on Tuesday afternoon. Senate aides said they were uncertain if the hearing could change McCain’s mind.

“I oppose including this provision in any funding measure now under consideration," McCain said in a December 10 letter to Daniel Inouye, chairman of the Senate Appropriations Committee, and Thad Cochran, the top Republican on the panel.

“Such measures would serve as inappropriate vehicles to make dramatic changes to the program," he said, citing past cost, schedule and performance problems with the LCS program.

One Senate aide said the appropriations committee expected to release summaries of an omnibus spending bill to fund the federal government later on Tuesday, but declined to say if the measures would include the Navy ship proposal.

McCain chastised Roughead in a separate letter dated December 8, for trying to rush through the revamped acquisition strategy during a lame duck session of Congress and said the Senate needed more time to exercise responsible oversight.

The congressional Government Accountability Office (GAO) last week said this was the third time the Navy had presented Congress with a difficult choice about the LCS program after budget hearings and defense bills had been written.

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“I would like to comment on how undesirable the process by which the Navy has made this proposal has been - outside of ‘regular order’; during an open competition; in a way that precludes full and open debate by all interested members; and without full information," McCain told Roughead.

He said the Navy’s plan appeared to be “basically inconsistent" with a recommendation from the GAO that the Navy not buy excess quantities of ships and mission packages before their combined capabilities had been demonstrated.

McCain said it was not clear if the LCS program would stay on budget and schedule until deficiencies affecting the lead ships had been fully identified and resolved.

Lockheed and Austal have agreed to extend the pricing in their LCS bids, which were due to expire on Tuesday, by two weeks to December 30, giving the US Navy more time to convince Congress to approve the revamped plan.

The Navy initially planned to buy 10 of the fast new coastal warships from one of the bidders, plus combat systems for five more ships, but last month said the pricing offered by both companies was so good that it could buy 10 from each.

Navy officials estimate the program will cost $US9.8 billion, but the Congressional Budget Office says it could cost $USR11.8 billion, although it acknowledged that it had not seen the actual pricing in the bids.

Buying both ships could yield savings in construction costs, but operating and maintaining the ships would probably be more expensive, it said.

The House of Representatives passed a pared-down spending bill last week, including the purchase of up to 20 LCS ships, but the Senate must approve the bill before it can be signed into law.